Major progress was made in reforming state-owned enterprises and turning around loss-generating operations in 1999, said Premier Zhu Rongji in Beijing today at the opening meeting of the current session of the Ninth National People's Congress (NPC).

The premier said, "these achievements encouraged the cadres and the masses of people to continue working to overcome difficulties and demonstrated that the objectives set by the central authorities for reforming state-owned enterprises and turning around operations within three years are attainable." "We accelerated the separation of government functions from enterprise management," Zhu said. We have basically accomplished the objective of cutting all business ties between the Party and central government organs on the one hand and the economic entities set up by these bodies and enterprises directly under their jurisdiction on the other."

He noted that the army, the armed police, and the procuratorial, judicial and public security organs are no longer engaged in business activities.

The reorganization of key state-owned enterprises progressed, resulting in the formation of a number of large enterprise groups. Efforts to effect internal reforms in enterprises and changes in the way they operate were further strengthened, he said. Through merger, bankruptcy, reorganization, association, debt- to-equity swap, improved management and other measures, the number of large and medium-sized loss-generating state-owned industrial enterprises and loss-generating enterprises with controlling share held by the state decreased significantly, he added. The objective of turning around the economic performance of state-owned enterprises within three years has been attained one year ahead of schedule in the textile industry. Profits were increased or losses reduced encouragingly in other industries. Significant progress was made in efforts to reform state-owned enterprises and turn around their operation in the three provinces in northeast China and other old industrial bases, with significant reduction of losses and increase of profits. The premier said that profits from industrial enterprises totaled 220.2 billion yuan in 1999, representing an increase of 52 percent over the previous year. Total profits from state-owned enterprises and enterprises with controlling share held by the state reached 96.7 billion yuan, a rise of 77.7 percent over the previous year, a record high for the past five years. The economic performance of most industries was noticeably improved. Industrial performance was better than the previous year in 27 provinces, autonomous regions and municipalities directly under the central government, Zhu said.